There are numerous new opportunities for private and international investors in Africa. For example, investment in Africa's energy sector, an essential engine of growth, falls short of US$40.8 billion a year. At the same time, demand is overwhelming: more than three-quarters of Africans lack access to electricity, presenting an impediment to both human and economic development for the continent.
How can African governments channel scarce resources into productive investment in the energy sector? An effective solution would be to increase private participation in power infrastructure. "In the global race for green growth, increasing investment in clean technologies is critical," says OECD Deputy Secretary-General Mario Amano. In new markets, such as renewable energy, gaps in investment financing could also be filled.
While Africa's future is inextricably linked to global markets, it is also dependent on home-grown regulatory reform. Critical bottlenecks in, or obstacles to, the development of African energy sectors include weak regulatory frameworks, expensive credit, underdeveloped capital markets and a lack of innovative risk-mitigation instruments. Keeping markets open to international investment is also vital, particularly given commitments made in G20, UN and OECD contexts.
As a lead reformer in Africa and a member of the G20, South Africa is an ideal host for the 4th NEPAD-OECD Ministerial Meeting on Mobilising Resources for Trade and Investment and Boosting Energy Investment and Carbon Finance in Africa. Key messages from the meeting, held in Johannesburg on 11-12 November, will be sent to the UN conference on climate change in Copenhagen in December. Says Ibrahim Assane Mayaki, CEO of the New Partnership for Africa's Development (NEPAD): "It is important to design Africa-owned national, regional and continental policies that provide a sound basis for emerging from the crisis."
The NEPAD-OECD Africa Investment Initiative's Ministerial Meeting and Expert Roundtable events gather key policymakers, the private sector, regional organisations, international partners and technical experts from African and OECD countries. They are hosted by South Africa's Department of Trade and Industry and are organised by NEPAD.
For more information see www.oecd.org/daf/investment/africa
©OECD Observer November 2009